Skip to main content

tv   Bloomberg West  Bloomberg  August 18, 2014 11:00pm-12:01am EDT

11:00 pm
>> live from pier 3 in san francisco, welcome to "bloomberg west," where we cover innovation, technology, and future of business. i am cory johnson, in for emily chang. president obama sending attorney general eric holder to ferguson, missouri. >> now's the time for healing. now is the time for peace and calm on the streets of ferguson. now is the time for an open and transparent process to see that justice is done. >> the president urged calm in the st. louis suburbs. live tweeting and youtube videos
11:01 pm
and small streams, tech is playing a major role in the demands for justice and peace. and a c.e.o. is leading the charge in every way. >> to our lead story, as violent protests rock the streets, technology is everywhere. many demonstrators protesting the shooting of michael brown and organizing their marches through facebook and giving the people instant details on what is happening on the ground through #ferguson. one of those is a native of st. louis and he has been posting tweets about what is going on. let's bring in the c.e.o. who is in new york via skype. and max, let me start with you,
11:02 pm
the role is very interesting because we are not just seeing vines or youtube videos but what is happening as it is happening based on your site. what does that look like from the inside? >> we had radio stations that filmed some music concerts and realized that they could actually go out there and use that equipment and broadcast live to millions. live streaming isn't just talking to one person live but broadcasting to one person but our platform can scale to millions. so using this livestream app that is available and they were using a filter to report live where the media couldn't go, because with the truck and everything and they reported and reached 1 million people in two hours. everyone's feed was -- >> wow!
11:03 pm
one million were watching live stream? >> it is like a stadium with about 50,000 people at the same time. and after they saw the stream, everything is recorded in the cloud so people who missed it but still see the tweets are able to watch it. so within a few hours after the live event, even more people watched it and it was reported on media, so the media was reporting what was happening in ferguson via livestream. >> david, you have been covering technology for a long time. for so long it has been about the way new technologies could change the world. are we seeing this actually happening now? >> we certainly are. the reports, for example, the fact that someone tweeted within two minutes after the shooting that he had seen the shooting is indicative of what kind of world we are living in and social media has tremendously altered
11:04 pm
the landscape and sped up the response both on the protestor'' side and responders' side and alarmed the governor enough that he brought in the highway patrol to start taking control of the situation although they have had difficulty doing that. it is incredibly significant to me that jack dorsey is there on the street and he is someone i know fairly well and i'm not surprised, but he understands the landscape is shifting and there's a lot of reasons why it matters deeply to him as a st. louis native. >> let's talk about that a little bit. i was amazed to see jack was there not because he is a billionaire but a well known corporate c.e.o. to be out in the front lines. not that anyone is for racial injustice. i'm going to call it a brave move for him to be out there and on the streets. is this typical of him or tell us about him or companies like twitter and other companies he
11:05 pm
has had a role in founding? >> both. he is a very socially-minded person. i don't know about him having protested elsewhere but he is a deep believer in justice and believer that these tools like twitter and square are contributing to a level of society and increase in social justice and you have to factor in he grew up in downtown st. louis and deeply affected by the decline of that city and polarization and i know him enough to talk to him about that. he cares about that. it is brave for him to be out there and impressive that he should show that he cares that much. it's a very important symbol for the technology industry and there are a lot of other things we could say about it, too. >> max, let me ask you, i know the way my social media feed is lit up by this protest and horrible shooting, i wonder what
11:06 pm
you know about the people watching the live streams what their other interests are and who is energized by this and is so upset that they are watching livestream videos? >> it is for the population to know what goes on there firsthand and the reporting that the radio station was able to establish is unprecedented. you couldn't get the tv trucks to be at that location. right now, they have upgraded to a camera in this broadcast device that we offer which gives them coverage which looks like television and zooming in, zooming out, whether it's a press conference and doing this for a few hundred dollars and scales to millions of viewers. and it is important if you look at internationally, our platform have been involved with occupy wall street and many other movements. the live television at scale is important in countries that are not democratic.
11:07 pm
it plays a key role in democracy to know that somebody can bring this to millions of viewers from their phone or their camera. >> thanks, gentlemen. coming up, get a room, that's what we are calling our special, taking a look inside how technological-driven changes revolutionizing the business. -- the hotel business. we will start with airbnb. ♪
11:08 pm
11:09 pm
11:10 pm
>> i'm cory johnson, and welcome to a special edition of "bloomberg west." we are calling it "get a room." one of the first companies that comes to mind about who changes
11:11 pm
the technology industry, would be the hotel industry. airbnb is the darling of the economy. but what can the hotel industry to do anything to hold off the jugernaut. we are looking at the numbers. >> it is a big deal. not an evaluation but the business. it is fundamentally changing the industry. $240 million, that is approaching marriott and hyatt and hilton. >> its growth is the expense of hotels. boston university study found for every 1% increase in their business, the rest of the hotel industry falls by five basis points and think about it. their growth is unconstrained by
11:12 pm
limits of real estate. marriot wants to add 30,000 rooms. they said we will add it in the next two reeks. they had boasts 550,000 listings. that's up over 5 100% from the end of last year and according to airbnb average stay is five nights. and they spent more. airbnb say they spend $978, nearly half more than hotel guests and their listings are unique. 57% are apartments or complete houses while 41% are just one room and 2% are shared rooms. and what percentage of airbnb pay income rental taxes?
11:13 pm
that number is between god and the i.r.s. >> question, how are hotel chains adapting to this and other changes in technology? we have a consulting expert and a c.e.o. that provides software to the travel industry. >> i feel like the changes in the travel business are so extreme because of technology that a business at 20 years ago that was call a travel agent, get me a flight, hotel and a car is all technologically-driven. how are hotels dealing with this? >> the key is to get connected and keep connected. the smartphone is the catalyst of what we are talking about including airbnb and do things 24 hours a day, any time you want and get information. the owners of hotel not only
11:14 pm
have to integrate their systems to provide personalized service but provide value-added service. >> the mobile aspect in the new part. >> the coolest company in travel technology today. >> what do you guys do? >> we proceed and e-commerce solution for everyone in the travel industry. it is a technology and deliver globally. allow connections around the world and search for booking whether it is car, hotels, airline. >> you essentially are the front end. someone might think they are logging into a web site -- >> american airlines. >> they are using your service front end and back end. >> that's right. >> what are hotels seeing that is different than before.
11:15 pm
>> 64% of all the bookings are hotel and hotel-related and everything that is happening in a hotel space is around personalization. everyone is trying to make it a unique experience for the consumers, companies like airbnb are playing right into the hands of what consumers are looking for. what do they want? a personalized experience that is customized in an area, city or region that is special for them and get it at a great rate. >> when i started researching this ad, i thought i was going to come across revenue management with the amazing statistic that 40% of all hotel rooms are empty on any given day. what i'm hearing is we moved beyond that problem, but we really gotten to the point that personalization, the kind of
11:16 pm
social trends are driving consumer decisions and that wasn't true five years ago. >> absolutely. and the problem with the hotel industry is systems not talking to each other. >> how many technologies are there that send the data into the internet? >> there are reservation systems, property-based systems for property management, systems for catering, all different systems for food and beverage which is catering and meeting rooms, all these different systems and none of those systems are customer-focused but operational focused. think about the last time you checked out of the hotel room, what did they ask you, room number, rather than thinking about you as a person. they need to be customer centric. >> is that happening? >> customers are looking for
11:17 pm
ways to book a hotel easier. how many systems are out there, how many hotel chains are out there. >> different types of data are absorbed by systems like yours? >> there is internally-built systems and ones you can buy through software houses and platforms you can connect into or combination of both. it's a difficult path right now to make a clean book booking. as customers want more personalization, they are looking to mobile devices to do that. as that trend continues to escalate, it is still new. across our platform, we see 5% of hotel bookings up to 30% all done on a mobile device, but that depends on what the connection is to and what type of booking is occurring. >> last question, hotels, because they have seen dramatic changes in technology, what is the one lesson that applies to all technologies seeing this customer-demanded, technological-driven change. >> you have to anticipate what
11:18 pm
the customer wants, knowing their past habits is a given. you have to anticipate what they are going to need and be there on a right device and have the right context of what they need really delivered. that's a challenge. >> that is a challenge for all industries. maybe the traveling industry. mobile booking services are trying to change the hotel experience. a c.e.o. will be explaining when "bloomberg west" continues. ♪
11:19 pm
11:20 pm
11:21 pm
11:22 pm
>> welcome back to this special edition of "bloomberg west." i'm cory johnson. how technology is changing the hotel industry. one that is seeing change is the booking process. people are finding it on mobile devices. a real-time bidding service for booking rooms at independent boutique hotels. we have the c.e.o., a veteran of the travel business. tell me what it is, first. >> we help serve the boutique hotel market and by doing so create a benefit for the consumer. we are in a one-to-one negotiation between the owner of the hotel and the traveler. those negotiations happen in real-time. we use technology to do that. and the travelers actually helping the hotel by occupying a room that would have otherwise gone unsold. >> that magic 40%. is the 40% rooms that are open, does that run true in boutiques? >> more extreme. >> why?
11:23 pm
>> chains have more of the opportunity to distribute their rooms through their own brand. and boutiques typically are not branded hotels and have limited opportunity for distribution, even though we are seeing groups of boutique hotels which would be considered small brands. >> what is it that has driven the growth, what about technology that has driven the boutique hotel growth? >> they are perfect for the traveler. people born between 1980 and 2000 currently 20% are just getting into their peak purchasing years but make up 0% of overall business travel expenditures. and these individuals are actually craving on the devices that they use, the mobile device, instant access to hotels as well as instant gratification, looking for convenience, but are very, very
11:24 pm
social, but kind of independently social. also looking for those unique experiences and collaborative spaces that boutiques offer. >> one of the things that we see is the change in booking time that people used to book and online people would book and expedia talks about this, but their booking online would go from a couple of weeks out to booking on a phone to a day out. do you see that with boutique hotels? >> it is about seven days out. it is a spontaneous traveler as opposed to the last-minute traveler. those individuals are making plans a little bit later in the process but not last minute. they want to make sure they are getting a great value, not necessarily looking for the
11:25 pm
cheapest room but a great value that will give them a unique experience. >> you find the cheapest room at the hotel they want? >> the best price for them and what they're looking for. >> these boutique hotels will charge more than a starwood hotel -- sometimes. how do you entice them to get on board with this program that will ultimately lower their revenue base for a given room? >> it's a little bit of, i guess in a misperception that boutiques are more expensive than chain hotels. on average, the boutiques will be about the same or actually below what you'll at the chain star hotels, four-star hotel to a four-star boutique. what we are doing a at stayful, not only get distribution at a low cost by comparison to the other online distributors but our focus is selling inventory
11:26 pm
that would go unsold. our consumers are helping them with their occupancy and revenue. >> after the airline industry and managed this revenue management, perishable inventory, maximizing pricing. how much are hotel managers look at we can lower prices, raise prices on any given day? >> what we are finding with boutiques, they will manage it right up until the minute and we had success working with boutique hotels and they will create new right headaches to get the opportunity for -- rate headaches to get the opportunity for demand and the spontaneous traveler, it is more flexible and dynamic pricing system. >> thank you very much.
11:27 pm
>> that's the special edition of "bloomberg west." we will talk to the c.e.o. of expedia. ♪
11:28 pm
11:29 pm
11:30 pm
>> you are watching "bloomberg west," where we focus on technology, innovation, and the future of business. i am cory johnson, in for emily chang. joining us for a special edition of "bloomberg west," "get a room," how the hotel technology is changing dramatically. expedia, 150 booking web sites in 70 countries. joining us right now is the c.e.o. of expedia. expedia is growing faster than it has in the past, why? >> well, a couple -- we are seeing a couple of trends. one is the globalization of travel favors expedia because we operate in 50 different
11:31 pm
countries right now and expanding very, very quickly and giving our suppliers the ability to market themselves not only in their home markets, but also on the international markets. we made big investments in technology and seeing those investments pay off. last quarter we grew bookings 29%. business is on a big pile of businesses already. a mobile revolution. more consumers are going mobile and that that plays into the investments in technology that we have made. >> let me back up and unpack some of that. one of the things you talked about was international. one of the trends, unlike here in the u.s. where we have many hotel contains, you don't have those opportunities
11:32 pm
internationally and the independent hotels are getting online, am i right in that read? >> that's exactly right, which these independent hotels previously could really only market through traditional travel agents to a limited segment and don't have brands to invest in. they are then marketed to consumers over 60 million consumers on a monthly basis in 50 different countries and take their content and translate it at substantial costs and make sure the picture is right, customer reviews start coming in and they have exposure to the global audience. that is something that was never possible before the internet and now it's possible with our technology. >> you talk about technology and investments paying off but your operating margins are declining on a year over basis. what is going on there? >> we think what we are trying to push is top-line growth for
11:33 pm
us. 29%, we expected our operating margins to come down. the most significant reason is our investment in sales and marketing. if you look at our business in the first half of the year, we spent over $1.3 billion in sales and marketing getting our brand out there on behalf of our hotel partners and that isn't something you can match. the bigger we get, the more customers we bring into our system and the more valuable we become. keep the top line growing and keep investing in our brand and our profits grow over 60%, that is a pretty good balance all across. >> there is a line in your 10k that talked about the time that people spend online booking travel. the distance from the travel when they are on a desk top is days or weeks and tablet it's less and on a phone is even less. what are the numbers actually and what does that tell you about the future of your business? >> well, the numbers on the
11:34 pm
desktop, the average is in the teens numbers. there is quite a bit of planning. so very, very planning for packages, which the average consumer will be booking 30, 45 days in advance. tablets tend to be more browsing behavior. consumers love browsing on their tablet and save the desktop for booking. mobile phone is about the last minute, which is hey, i'm looking for a hotel where in the old world they looked up to see a vacancy sign and booking on their smartphones and to the extent that the hotel has a presence, they will have their opportunity to market and more and more hotels are same day mobile-only kind of deals which
11:35 pm
is a win-win that has 40% of the rooms unsold and a great deal for the consumer. >> what are the impact on hotels when that window is shortening. more last-minute booking. how do hotels deal with that? >> some hotels need to get better revenue management out there. there is more risk in their book of business because more of their business becomes last minute. they need to be very good in revenue management and have to make sure they have the right presence across the various distribution platforms. so that includes brands like expedia and and looking at some of the new distribution platforms like trivago and making sure they have presence across the big platforms out there so they are available to the global customer and available across platforms as well. one of the interesting trends we are seeing with consumers is not only are they shopping mobile
11:36 pm
but now shopping across device and they expect the experience to be consistent when you go from one device to the other. they don't want to start their search all over again and investing in new technology where if you have done a search on your mobile phone, it will show up on your desktop and if you did it on your desktop, it will show up on your tablet. >> sounds expensive and hard. thank you very much. from all inclusive vacation packages to stylists, hotels are stepping up to to appeal to a new generation of customers. ♪
11:37 pm
11:38 pm
11:39 pm
11:40 pm
>> i'm cory johnson and this is a special edition of "bloomberg west," "get a room." providing clean and comfortable rooms is no longer enough. it takes a lot more. hotel chains these days finding out what their guests out, trying to fight off new competitors. starwood c.e.o. here. i know so many people, mark, who shop starting with your loyalty program and picking the hotel second.
11:41 pm
how do you evolve that from the beginning of that search tool using new technology? >> one of the things we have done a good job of it, starwood is listening to our guests. if you think where our technology investments come from -- it comes from our members, listening to them and what matters to them trip to trip. that has been driving our technology investments. for us, it is technology as an enabler and what our members and guests care about the most. >> that is your membership program. my loyalty with starwood, i stay at them quite a bit and what i want is a bigger, quieter room. that's a cost thing, but that doesn't get answered by the fact that i'm not going to spend too
11:42 pm
much money. how do you deal with that in the most basic desire from your customers? >> it's interesting, as we study what really matters, it is funny how big data. it comes down to a couple key things and one of the things we have learned from our members is their needs change trip to trip. we were doing one of our focus groups and one of our members who is a platinum member and she said i'm on the road 100 nights. and most of the time, i arrive late and a diet coke and a cobb salad. and if you don't understand my unique needs for that trip, if you look at me as just the platinum guest instead of the valuable guest of yours who has
11:43 pm
unique needs, then you missed the opportunity. we spent a lot of time on personalization and going to work at understanding what really matters to our guests trip to trip. and if that changes, how are we relevant for them each and every time. >> the frequent fliers who are there, what percentage of your customer base are they and what percentage of your profit base are they? >> 2% of our guests deliver 30% of our organization's profit. that is 80-20 on steroids. any given night in our system, over 50% of our guests sleeping in our hotels are members of the starwood preferred guest programs. so they are incredibly valuable. >> any industry would like to know what their customers want more. what is the technology? what are you doing and how much is it harder to know that much data about your guests?
11:44 pm
>> mobile has been part of that. 50% of our guests come to us from mobile devices. if you ask anyone to talk about what's important to them and what's personal to them, they will bring up a mobile device, it's where they carry their tweets and their pictures and got so much a part of their lives. and so we created an application that knows where you are in the process of booking a hotel, to what offers we put in front of you. it will change depending on when you arrive at our hotel. we are doing work. we were the first hotel company to have keyless mobile device and piloting that across our organization now and with much more to come. we recognize that our guests have needs and expectations of what they can do from a mobile
11:45 pm
device and we spend a lot of time on meeting and exceeding those expectations. >> what's the one biggest way that airbnb is changing your business? >> for as long as i can remember, there are experts that have tried to get between us and our guests. and i think the shared economy is the most recent example of that, but what that does for us, it validates our strategy of paying laser-like attention to our most valuable guests, making sure we understand them as individuals that we meet and exceed their expectations each and every time and do that through our own applications and own channels. disruption around that country, it's healthy for us. it validates a strategy that we know is right. >> mark, starwood senior vice president. thanks very much. unsold hotel rooms can be a major drain on the hotel's bottom line but hotels are
11:46 pm
trying to get customers and keep customers and keep them happy. that's next on "bloomberg west." ♪
11:47 pm
11:48 pm
11:49 pm
>> welcome back to "bloomberg west," i'm cory johnson. all of the technological innovations changing the hotel industry. and air bnb are providing
11:50 pm
alternatives. other new technologies completely change the way hotels fill a room. i checked in with one to see the cutting-edge technology. there is something magical about a great hotel a cozy bed, , perhaps a beautiful view, but the real magic in hotels today is technology. high tech initiatives are completely remaking the $412 billion industry. 40% of hotel rooms are empty at any given moment. and some web sites are addressing. but scott williams says social media will draw in return customers to his hotels. >> it's an emotional connection. >> a high-end boutique group has become a social media addict. >> we are managing the web sites
11:51 pm
and assigned per brand and manage the flow of traffic. >> a customer tweeting i just got engaged at the hotel, they will send up a bottle of champagne. back in the day of travel agents, travelers would stick with known quantities and brand-name hotels. with the rise of internet booking, the boutique hotel business exploded. >> big brands are not just 53% of hotels. still a challenge for the boutiques. >> hard for boutique companies to make that investment in the technology and make a bet on the right technology that's going to be around. >> that said, technology-driven chains are letting the best get back to basic, getting top dollar for the experience. a business traveler is the most
11:52 pm
important customers in the hotel industry and one of the software company helping them to manage is concur. it comprises $50 billion in travel and entertainment spending and reaching out to 25 million company. we have the c.e.o. via skype from hawaii. thanks for joining us. steve, i don't do product reviews, but i got to say one of your products has been one of the best technological innovations for me. talk to me what happens to behind the scenes and send it to you and shows up on my computer. >> whenever you book an airline or hotel, airbnb or starwood, we pull that information in and load it on to tripit. if you take the reservation that
11:53 pm
you get into it, it will automatically fall into the technology. >> and you have seen fantastic growth. how fast can you continue to grow, how big is the market that you're looking at? >> first of all, the market that we serve is corporate travel booking, itinerary management. and this is unautomated and this is driving our growth. if you look at the last 13, 14 years, our growth rate has been 26% and we think that growth rate will continue for years and years to come. >> you have been lumped into the service category. we are interested in what companies do. but you have had a tremendous boon or excitement in your stock because your software is trading like 160, 170 times earnings.
11:54 pm
are there enough verticals for you to grow into that valuation? >> the truth is, we are less than 10% concentrated. the opportunity to continue to grow this business and be a multibillion dollar company is very real. we invest aggressively. folks like you who use our company, there are million users. and this is a market that we ought to be able to see a quarter or of a billion users. >> is the travel industry on the cutting edge or on the trailing edge of technological adoption? >> i think we are just -- in consumer travel you saw great innovation 10 years ago or so. in the corporate area, it is just starting to hit. concur is a big driver of that
11:55 pm
innovation curve. companies are starting to embrace. individual is the most important part. how do you serve them in the way they want to be served. some of your viewers will book with a travel agent or book with a booking tour, kayak or favorite supplier and we have to embrace it and bring it together so you can get your corporate rates and wouldn't it be nice if the information flows into your expense report. that's where we are going. and the innovation opportunities are massive and we are just at the beginning of that curve. >> i think a lot of individuals have experienced the losing of the travel agent and moving their business online. are corporations more reluctant to do that or why have they changed so much slowly? >> i think corporations tend to what they are looking for, they want to make sure their needs
11:56 pm
such as providing duty of care services for their customers are met before they make that shift. we all understand, i want to follow my corporate policy, if my policy is to book at starwood, however you book is always at starwood and technology is delivering that service. no matter where you book, make sure you get your corporate rate. but the other part of this is really important is, for our customers, more than half of the bookings occur outside of corporate policy. god forbid something happens in the world, how can you get out of that bad situation and that only gets you through technologies. >> thank you very much. we appreciate your time all the way from hawaii. get the latest headlines on your phone, tablet on and see you tomorrow with more on "bloomberg west."
11:57 pm
11:58 pm
11:59 pm
12:00 am
>> the preceding was a paid program. the opinions and views expressed do not reflect those of bloomberg lp, its affiliates, or >> the following is a paid program for the tummy tuck slimming system. it instantly erases inches from your tommy, trims fat off your belly without diet and exercise. it burns off faster that exercise alone and delivers results so shocking that at first people do not believe it. >> my wife saw an ad in the newspaper.


info Stream Only

Uploaded by TV Archive on